Rare Earth Metals Frequently Asked Questions
Frequently Asked Questions about the purchase and resale of Rare Earth, Rare Industrial and Rare Technical Metals through Swiss Metal Assets, S.A.
FREQUENTLY ASKED QUESTIONS
How exactly does the service provided by Swiss Metal Assets, S.A., work?
Basically, we provide our clients the opportunity to convert their devaluing cash into the physical ownership of eleven of the most globally sought after rare industrial metals. The metals are stored privately in ultra-secure vaults in a tax-free zone outside Zurich, Switzerland. At your discretion, the metals can be sold at any time with the proceeds turned back into cash, in any currency desired, and transferred anywhere in the world you designate, at that time.
Which metals does Swiss Metal Assets, S.A. sell and how are the metals sold?
We primarily focus on offering eleven commonly used but scare industrial metals packaged in 3 distinct “baskets”, and industry-ready gold and silver granulates. The gold and silver granulates are sold separately as an add-on option to the baskets.
- Basket A: “Key Industries” contains six industrial metals: Indium (2 kg), Gallium (2 kg), Hafnium (3 kg), Tantalum (8 kg), Tellurium (7 kg), and Bismuth (47.4 kg).
- Basket B: “Solar and Energy” contains three industrial metals: Indium (2 kg), Gallium (2 kg), and Hafnium (3 kg).
- Basket C: “Construction and Engineering” contains six industrial metals: Tantalum (4 kg) and 20 kg each of Molybdenum, Chromium, Cobalt, Zirconium and Tungsten.
What sources are available which show the day-to-day prices of these baskets?
Their price is solely determined by supply and demand factors, which change regularly. You can track our basket prices daily on our webpage.
Are there any additional charges beyond the cost of the metal baskets?
Yes, there is a 2% surcharge added to the final price of all metal baskets. The third party storage company in Switzerland charges an additional 1.5% of the total value of the metals being stored, annually. Swiss Metal Assets has locked in this price for an initial five year time span.
Who is Swiss Metal Assets?
We are a conglomerate of registered companies (Swiss Metal Assets, S.A., and Schweizerische Metallhandel, A.G.,) that have a combined and verifiable total of over 60 years in business, with physical offices in New York, Zurich, Frankfurt and Panama City, Panama. Additionally, we are regulated by Swiss Customs Laws and are a Swiss government approved user of the coveted “Swiss” description in our company name.
We also have been reviewed and approved by a number of reputable investment groups, including The Sovereign Society and Agora Financial. We also have been the subject of scrutiny from well respected investment newsletter writers, including Mark Nestmann and The Q Report.
Why would someone want to own rare industrial metals?
For at least 4 important reasons:
The first is WEALTH PROTECTION. By owning a basket of these rare industrial metals, you can insulate your liquid assets from inflation and currency devaluation. These metals, like most hard commodities, increase in value in inflationary times. During your ownership period you are currency “risk-free“. By holding hard assets, like rare industrial metals, you are not in any currency during that period, basically isolating you from any currency risks. At the time of sale of the metals, you can denominate the proceeds of the sale in any currency you wish, depending on your opinion of the desirability of a particular currency at the time of sale.
The second is SAFETY. With some of your cash in rare industrial metals you will be able to sleep at night. You will be protected from inflation and devaluation. You will have some cash out of dollars and into hard assets, so you won’t suffer from the erosion of your buying power as fiat currencies continue their decline in value. Additionally, you will own hard assets that are very safely stored offshore in a secure vault in Switzerland, in the event something catastrophic happens in the your home environment.
The third is PROFIT. With a constant and increasing demand for these metals internationally combined with a limited and diminishing supply, these “scarce“ industrial metals are expected to continue to gain in value over the next 3-5 years. The market value of our standard “ A basket” of 6 metals has increased 34% since January of 2011.
The fourth is LIQUIDITY. The “baskets” are 100% liquid and can be sold anytime. The proceeds of the sale are usually available within 5-7 business days and can be denominated in any currency you wish. We will then transfer the currency you choose to any location or third party you desire, worldwide.
Why are the values of these metals expected to increase?
For numerous reasons, the value of rare industrial metals is expected to continue to increase, possibly very soon and quite rapidly.
Industrial buyers are quickly trying to gain control of the supply chain as prices increase and supplies decline. Governments are also involved in this “control of supply” issue. Korea, in June 2011, placed Indium, a metal in our A and B baskets, on their critical substances list to protect Samsung and LG, 2 very large electronics manufacturers. The USA, through Congressman Mike Coffman, has very recently passed the RESTART ACT 2011 to stockpile rare metals to protect US industry and the military from shortages. China, of course, restricted supply of these metals significantly in late 2010 and intends to continue decreasing its exports of these metals in 2011 and 2012, hoarding them for their own use and using their monopoly of these metals as a political and economic weapon internationally.
Given that these are industrial metals used across 80% of industry worldwide, the demand is constant and increasing. There may be fewer homes being built in the USA lately, but if you watch the sales of Apple and the millions of technology devices being produced worldwide, all with these metals inside, you will quickly realize the huge upside profit potential over time.
Is demand for rare industrial metals constant and is it expected to increase in the future?
In the U.S. and other developed nations, rare industrial metals are vital to the financial well-being of our industries and have become synonymous with the quality of life we enjoy. They are involved in the manufacturing of hundreds of thousands of products we use every day. It would be hard to imagine how our modern lives would be the same without them.
Presently, without these metals, many high-tech products, and technological breakthroughs we benefit from today such as the sleek flat screen TVs and laptop monitors, microchips, smaller, faster and more powerful smart phone’s, and so forth, would not be possible. These metals are needed by industry to continue to develop the newer and more technologically advanced products of tomorrow.
The free enterprise system—prominent throughout the world—with its inherent competitive nature and its drive towards modernity, efficiency and innovation, will ensure the need and demand for these metals in the future, as it has in the past.
Across the developing world, these metals are extremely critical to the continued growth and development of nations such as China, Russia, Brazil and India, whose massive industrial, infrastructure and developmental expansion requires vast amounts of metallic raw materials to sustain their current growth levels.
Industry authorities worldwide, such as the United Nation’s Energy Program (UNEP), the US Department of Energy (DOE) and the European Economic Commission, among others, report that the present global shortage of industrial metals, the long lead times and environmental difficulties of developing additional sources, combined with the unreliable and costly recyclability of these metals and the monopolistic predominance of the global supply chain by China, combine in a “perfect storm” of micro-economic conditions that will result in significant price increases for these metals over the next 20-30 years, or longer.
Why can’t I just buy these metals on my own?
Before we pioneered this program 5 years ago, even if you knew about rare industrial metals at that time and thought owning them was a good idea, you would have had to start with 100’s of thousands of dollars (at least) to buy in; you would have to find a reputable and reliable broker, deal with shipping, storage, assay values, customs fees, import and export duties and taxes, paying all the expenses at each stage of your acquisition process – additionally tens of thousands of dollars. Not only is “going it alone“ very expensive and well above and beyond the cost of the raw metals, it is also well above and beyond the skills and abilities of most individuals with no experience in this marketplace.
Is owning rare industrial metals risky?
These metals are not considered financial products and are physically real, tangible commercial goods. They are owned 100% by you on a fully allocated basis. Therefore, you do not take on the risk of the issuing institution, as you would when investing in financial products such as fixed-interest securities, certificates, stocks, bonds and so forth. Additionally, you don’t have to shoulder the business risk of insolvency or bankruptcy, as you own the metal baskets 100% yourself, and may sell them through any industrial metals dealer worldwide, without the involvement of Swiss Metal Assets.
What would happen to the metals in the case Swiss Metal Assets, S.A. should become bankrupt?
The metals continue to be the property of the purchaser as confirmed through your Certificate of Ownership. All the metals are stored separately and exclusively marked as customer property in the storage vaults in Switzerland. Therefore, it is not legally possible for any creditors of SMA to have access to your metals, ensuring they remain totally secure and under your sole ownership. Additionally, the metals cannot be moved by anyone without the owner’s written approval, the owner’s original Certificate of Ownership (with full identification) and the supervision of up to three authorized personnel at the vault..
What taxes do I have to pay and when do I have to pay them?
Current Swiss tax legislation specifies no sales taxes or capital gains taxes are to be imposed on the metals while these metals are stored in or sold from the duty-free zone in Switzerland. The Swiss value-added-tax of 8% will be imposed only if you have the metals removed from the warehouse and delivered to another destination. Tax legislation in your own legal jurisdiction is a matter for the owner of the metals to comply with, independently of Swiss Metal Assets.
How do I know what metals are in each basket?
Every single basket is individually labelled and contains information such as the charge (tracking) number, the contents, weight and purity levels of the metals and the form each metal is stored in (bars, rods, blocks, pellets, powder, wafers, etc). Prior to the metals receiving shipping clearance, the contents are verified by our metal traders, as the first inspection on their trip.
What other verification of the contents is conducted during shipping?
There are an additional 6 inspections and verifications made on the metals’ trip to the vault in Switzerland. In Germany, German Customs Authorities randomly check the contents, purity and amount of the metals being shipped. After passing through German Customs, the forwarding agent will check the contents again as they are required to sign-off on the shipping documents, and thus are also responsible for the shipment description’s accuracy.
Upon reaching the German border, enroute to Switzerland, another transport check is made to verify the contents of the baskets. For example, the Hafnium in both the A and B baskets require an additional check as it cannot be exported outside the E.U. without proper verification and documentation.
On the Swiss border side, the metals will be checked again by the Swiss Customs Authorities, since these metals are subject to import duties and customs fees in Switzerland. Thereafter, upon arriving at the customs warehouse, the metals will undergo their sixth check before being approved by Swiss Customs for unloading.
Finally, prior to storing the metals in the underground vault, the baskets will be verified for the seventh and final time by the Zurcher Freilager, the operators of the vault in Switzerland.
How are the metal baskets assigned to the customer?
Each metal is packaged by weight, and stored in packaging sanctioned by Swiss Customs. As a customer of Swiss Metal Assets you receive a Certificate of Ownership which includes your ownership registration or “charge” number.
How do I locate my metals in the future?
The Certificate of Ownership you receive contains your ownership registration number or “charge” number. That number serves as a tracking number to quickly and easily locate your metals within the vault in Switzerland.
What proof of ownership do I receive?
You will receive a Certificate of Ownership legally designating you as the owner of these metals. Your certificate of ownership acts very much like a vehicle registration certificate or land deed, where the document legally confirms the ownership of a physical asset (real estate, automobile,etc) and is accepted as valid proof of ownership.
Why is the vault located in Switzerland?
There are numerous reasons why we have selected Switzerland as our warehousing base. One reason is Schweizerische Metallhandel, A.G., Swiss Metal Asset’s trading partner is headquartered in Switzerland. Secondly, for tax, political and other reasons, investors the world over believe it is strategically important to warehouse physical assets outside of the U.S., the European Union or Canada. As Switzerland has enjoyed a very high level of economic and political stability for over 500 years, it has long been regarded as being the most secure country in the world.
Are the metals insured while they are stored in the vault?
We have doubly insured the metal baskets during their transport on behalf of our clients, using two distinct and separate insurance companies, adding an extra layer of protection to our standard safeguarding policies. The storage fees paid to the vault also include full insurance coverage of the metals baskets for the duration of the storage period.
Can I visit my metals and the storage warehouse in Switzerland?
Yes, definitely; you can visit at any time upon making prior arrangements with the vault. You will require picture identification and your original Certificate of Ownership. Your visit will also require the supervision of up to three authorized personnel from the vault.
Can I store the metals in my home?
Yes, metal baskets can be stored at a place of residency or other individually designated location, given certain regulatory specifications are met, regarding proper storage and handling. It’s also good to keep in mind, if you chose to take your metals home, costly and detailed analyses will be required prior to selling your metals in the future.
In addition, you will also be held responsible for any duties, taxes, shipping expenses, insurance and the full costs of any other requirements. The total costs will also vary depending on your citizenship and the country where the metals will be housed. Furthermore, as with any valuable asset kept in a lower security residential setting (as compared to the Bank Level 1, high security vaults in Switzerland), there is the risk of loss by theft.
Can I sell my metals to other metal traders as well, and how long does it take to sell the metals?
Once purchased, the metals become your property. As a general practice, we will arrange the sale of your metals on your behalf. This is usually the easiest and cost effective way of selling your metals. Using the services of SMA to sell involves no sales or other commission for this transaction. However, you are free to sell your metals through anyone, to whomever you like, whenever you like.
Because our metals contain a proven level of purity and because of our strong and longstanding industry connections the world over, we have an excellent resale ability that serves as an integral part of our comprehensive service package and which we employ on behalf of our customers free of charge. Just notify us in writing of your intentions to sell your metals, and we will either arrange to sell them into the industry for production purposes, to another client for investment purposes or repurchase them ourselves from you. The metals are extremely liquid and can usually be completed in 5-7 business days.
As a note of caution, if you decide to sell your metals through another trader, depending on the particulars, a costly and possibly very extensive analysis of quality and purity may be required. Bear this in mind as this will adversely affect any profits gained from the appreciation of your metals.
In short, it’s much easier on you to have Swiss Metal Assets, S.A. sell the metals and it is almost always more economically advantageous, as well. However, you are totally free to sell your metals to a third party, or directly to the industry, if you would prefer to do so.